Daily Roundup / EZchip Stock Drops as Big Client Evaporates

Class action case again Africa Israel moves forward; Webstream again brings turbulence to Gilat; NICE has strong quarter but projects slowing.

EZchip stock plunges on loss of big client Huawei: EZchip stock plunged 25% during Wednesday night Nasdaq trading despite announcing that it beat forecasts in the fourth quarter of 2012. That's because along with its good results, it admitted to the loss of major clients. In the post-results conference call EZchip CEO Eli Fruchter said that two central customers are sharply scaling back orders. One of the two is the Chinese electronics behemoth Huawei, which will start making router chips in-house and says it will work with EZchip as needed. Meanwhile, EZchip reported a 7% year over year increase in revenues to $15.2 million, and quarterly profit of $7.8 million or 26 cents per share, up from $6.3 million or 22 cents per share the year before.

Gilat swings down on Webstream write-off: Gilat Satellite Networks stock swung wildly on Wednesday, culminating in a nearly 7% tumble on Nasdaq after the company sank into the red during the last quarter of 2012, following a $32 million goodwill write-off for its subsidiary Webstream. That adds to a $17.9 million write-down on Webstream in 2011. Anyway, Gilat, which is based in Petah Tikva, reported a small increase in revenues to $97 million for the fourth quarter of 2012, up from $94 million the year before. Revenues for the year 2012 inched up to $348 million, from $339 million the year before. But the company reported an operating loss of $28.1 million following that write-off and a net loss of $24.3 million for the quarter. For the final quarter of 2011 Gilat had posted a net loss of $11.5 million.

Court orders probe into Africa Israel bond offering: A Tel Aviv court yesterday agreed to allow a class action motion to proceed against Africa Israel Investments, its controlling shareholder Lev Leviev and company officers. The suit, which is worth about NIS 30 million, followed the plaintiff's purchase of series B9 Africa Israel bonds in September 2009, just before the company entered bankruptcy proceedings. Benjamin Asulin bought NIS 422,000 worth of bonds and quickly lost NIS 52,000, and argues that the company was not transparent. The court proposes to appoint a third-party expert to decide whether the company was properly disclosing its state of affairs in real time, and also to examine the relations between institutional investors and the company before the B9 bond offering.

NICE Systems posts record for Q4, disappoints on guidance: Disappointing guidance sent shares of customer-care software company NICE Systems down 5% on Wednesday even though the company's results for the last quarter of 2012 reached new heights. NICE yesterday reported revenues of $240 million, compared with $214 million in the parallel quarter of 2011. Fourth-quarter net profit rose to $43 million, from $38 million the year before. But NICE is predicting revenues of just $220-230 million for the first quarter of 2013, which would mean its double-digit pace of growth is slowing. The consensus, points out Ori Licht of IBI, was for first-quarter sales of $243 million.

With reporting by Dror Raich, Hila Raz

AP
Hagay Frid